Background

This article identifies the steps required to manage SuperStream request for final benefit rollover out when there is a tax refund in the winding up fund to ensure compliance and seamless fund transfer to another complying super fund.

Issue

If the expected tax refunds is part of the final rollover benefit, the rollover out request via SuperStream can only be initiated after the tax refunds has been deposited into the bank account of the fund.

When you are finalising the fund wind up financials prior submission to the auditor and tax lodgment, there will be insufficient cash in the fund to process final rollover payout when there is no tax refund received. Thus, a SuperStream rollover out is not possible given there is no cash involved. 

Solution

Before processing the recommended manual rollout event, please read through the section below: FAQ: Will the Auditor Accept the Manual Rollover out Event? 

Step 1: Process a manual business event of rollover out transaction to clear the member entitlements to zero in the balance sheet. 

Navigate to Fund Level> Transactions > Member Expense > Rollover/Lump Sum Out.

Notes: You can process the period update to the winding up date and then process the manual Rollover/Lump Sum Out. Leave the final member benefit payment events as modified events are acceptable. 

1. Select the relevant member, payment date, and provide a description for the transaction.
2. In the "Condition of Release" section, choose 'Rollover.'
3. Select the payment Amount - "Full".
4. Go to Payee Details Tab- Fill up Fund Name, Member Number,or Payee USI.
5. Go to Payment detail to review the amount of Rollover.
6. Then click Submit.

When the fund has been audited, tax was lodged, and final tax refunds has been paid to the fund.  This is when you will need to initate the rollover out via SuperStream event amounts.

Step 2: Remove the Manual Rollover out events processed earlier

Navigate to Fund Level>Transactions> Browse Events 

1. Drop down Group By: "Type".
2. Search for Type: Rollover/Lump Sum Out.
3. Search the Roll/Lump Sum Out event of final member benefit paid out  generated.
4. Click on the event.
5. Click on Delete to remove this remove this event.

By deleting this rollover out event, the member balance in the accumulation account will be reinstated.

Step 3: Temporarily roll back the tax finalisation and remove fund end date so that you can initate rollover out request via superstream. 

After rolling back the tax finalization, navigate to Fund Level > Fund > Fund Details.

1. Click Edit on the top left
2. Remove the end date field
3. Click Save & Close.

Step 4: Initiate Rollover-Out request via Superstream

Navigate to Business Level>Transactions> Rollovers & Release Authorities

1. Click on Initiate Rollover out
2. Search and select the fund name
3. Select the Member Name
4. Enter the Receiving fund Name, ABN, USI and Member ID for APRA fund 
5. Select Rollover Type as  "Partial" instead of Full Rollover Out amount and put the exact final rollover out amount (so that you do not need to do period update that will result to changes in member balance).
6. Click Initate Rollover. The status will be updated to "Request Received" 
7. Copy the rollover out detail to  provide to the trustee to make Rollover out payment via the fund bank account to the bank account and insert Class payment reference number.
8. Once trustee has make payment, go back to the Rollover & Release Authority Console to click confirm payment
9. Business event of Rollover out will be generated via superstream.
10. If you want to process the cash out and rollover out back-dated to Fund End Date, you may consider to use Fit To date function. Ensure the cash event is dated as at fund wind up date before you match with the Business event. 

Please refer to Help Articles on Initiate Rollover out (via superstream) &  How to enter details for Roll out through superstream.

Note:  In a fund wind up, there will be no longer a  requirement to process the next financial year reconciliation or lodgment in Class. If you want to wait for the receiving fund to respond to the Rollover out so that the status will show as "Complete", please do not update the fund wind up date or suspend the fund until you received the status update.

FAQ:

• Will The Auditor Accept the Manual Rollover Out Event?

Discuss the acceptance criteria with your auditor. Auditors often request the SuperStream reference for rollover requests, including details like payment reference ID, fund name, member name, start date, rollover type, and amount.

Auditors may have different views on balance sheet presentation for winding-up funds. Some prefer zero assets, liabilities, and equity, while others accept zero equity with equal assets and liabilities. Member entitlements are usually set to zero.

Considering member balances may include accrued amounts, you can either:

1. Set member entitlements to zero and process a manual rollover out event.
2. Leave receivable amounts in the member entitlement accounts.

Check if auditors accept the final manual rollover transaction or allow member entitlements to exceed zero before receiving the tax refund. Some auditors accept manually processed rollovers and may issue a management letter, as winding-up funds usually do not submit annual returns the following year.

• How many days will ATO cancel ABN after lodging final return?

ATO will not cancel the ABN of the SMSF until 28 days after the lodgment of final return for the winding-up fund.